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Jazz Pharma (JAZZ) Beats on Q3 Earnings, Ups Sales Guidance
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Jazz Pharmaceuticals (JAZZ - Free Report) delivered adjusted earnings of $4.31 per share for the third quarter of 2020, which beat the Zacks Consensus Estimate of $4.03. Earnings rose 5.1% year over year driven by higher revenues.
Total revenues in the reported quarter rose 11.8% year over year to $600.9 million and beat the Zacks Consensus Estimate of $574 million.
This year so far, Jazz’s shares have declined 1.3% compared with the industry’s decrease of 11.3%.
Net product sales increased 12.1% from the year-ago quarter to $597.0 million driven by continued strong performance of Xyrem, strong initial Zepzelca sales and recovery in sales of Defitelio and Vyxeos. Royalties and contract revenues declined 26.8% to $3.9 million in the quarter.
Neuroscience Products
Sales of neuroscience products increased 7% to $456.9 million.
Sales of Xyrem, approved to treat cataplexy and excessive daytime sleepiness (“EDS”) in narcolepsy patients, rose 5% year over year to $447.8 million. Sales were driven by 4% rise in bottle volume growth. The average number of active Xyrem patients increased 2%. New patient diagnoses and enrollments of Xyrem are being hurt due to COVID-19, a trend expected to continue during the pandemic. However, the negative trend improved somewhat in the third quarter from the second-quarter level.
Jazz’s newest drug Sunosi recorded sales of $9.1 million in the quarter, higher than $8.6 million in the previous quarter. U.S. prescriptions rose 7% from the previous quarter.
Sunosi was launched for excessive sleepiness in narcolepsy & obstructive sleep apnea in the United States in July. It was approved in Europe in January this year with a rolling launch initiated in May.
Oncology Products
Oncology product sales in the third quarter of 2020 increased 37% to $138.2 million.
Erwinaze/Erwinase (for acute lymphoblastic leukemia [“ALL”]) revenues were $20.1 million, down 41% year over year due to supply constraints.
Defitelio sales increased 34% to $50.2 million in the quarter due to recovery in hematopoietic stem cell transplants that had previously been postponed due to the COVID-19 pandemic.
Acute myeloid leukemia drug, Vyxeos generated sales of $30.8 million, up 4% from the year-ago period
Zepzelca (lurbinectedin) was approved by the FDA in Junefor the treatment of adult patients with metastatic small cell lung cancer (SCLC) with disease progression on or after platinum-based chemotherapy. The company launched the drug in the U.S. market in July. The drug recorded sales of $36.9 million in the third quarter.
Other product sales declined 58.2% to $1.87 million.
Cost Discussion
Adjusted selling, general and administrative (SG&A) expenses rose 17.6% to $186.2 million due to higher expenses for multiple product launches.
Adjusted research and development (R&D) expenses declined 3% to $71.1 million, as easy comparison with the year-ago quarter offset the impact of escalating expenses related to pipeline development. The year-ago quarter’s R&D costs included a milestone payment to Pfenex, which was missing in the third quarter of 2020
2020 Guidance
The company raised its financial guidance for 2020 based on strong performance of its drugs during the third quarter and the robust launch of Zepzelca, an innovative new treatment for relapsed SCLC.
The company expects 2020 earnings in the range of $12.20-$13.00 compared with the prior expectation of $11.90-$13.00. Total revenues are expected to be in the range of $2.32-$2.38 billion versus $2.23-$2.33 billion expected previously.
Total product sales are anticipated in the range of $2.30-$2.36 billion versus $2.21-$2.31 billion expected previously.
In neuroscience, Jazz raised the lower end of the guidance range. Neuroscience sales are expected in the range of $1.76 billion to $1.8 billion compared with the previous range of $1.73 billion to $1.8 billion. The Oncology franchise is expected to record sales of $525 million to $565 million, higher than the previous range of $445 million to $525 million, reflecting the robust launch of Zepzelca and improving trends for Defitelio and Vyxeos.
While adjusted SG&A expenses are anticipated in the range of $73+025 million to $765 million (previously $700 million to $750 million), adjusted R&D expenses are expected to be in the band of $275 million to $305 million (maintained).
Pipeline Update
Xywav (JZP-258), a low sodium formulation and a Xyrem follow-on product, to treat EDS or cataplexy in narcolepsy patients was approved by the FDA in July and launched this week.
Xywav has also been developed for Idiopathic hypersomnia or IH in a phase III study. Positive top-line data from the study was announced last month. The company expects to submit a supplemental new drug application (sNDA) for label expansion of Xywav in IH patients in the first quarter of 2021 targeting a launch in the fourth quarter.
Jazz is currently developing JZP-458 in a pivotal phase II/III study for the treatment of ALL and lymphoblastic lymphoma. Jazz plans to submit a biologics license application to the FDA for JZP-458 by the end of 2020.The company plans to initiate a phase IIb study early in the first half of 2021 on another pipeline candidate, JZP-385, as a potential treatment for essential tremor.
Jazz Pharmaceuticals PLC Price, Consensus and EPS Surprise
Cassava Sciences’ stock price has surged 71.7% this year so far. The consensus estimate for 2021 has improved from a loss of 44 cents to earnings of 33 cents over the past 60 days.
Endo International’s earnings estimates have risen from $2.12 per share to $2.14 per share for 2020 and from $2.09 per share to $2.14 per share for 2021 over the past 60 days.
USANA’s earnings estimates have risen from $5.16 per share to $5.40 per share for 2020 and from $5.31 per share to $5.50 per share for 2021 over the past 60 days.
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Jazz Pharma (JAZZ) Beats on Q3 Earnings, Ups Sales Guidance
Jazz Pharmaceuticals (JAZZ - Free Report) delivered adjusted earnings of $4.31 per share for the third quarter of 2020, which beat the Zacks Consensus Estimate of $4.03. Earnings rose 5.1% year over year driven by higher revenues.
Total revenues in the reported quarter rose 11.8% year over year to $600.9 million and beat the Zacks Consensus Estimate of $574 million.
This year so far, Jazz’s shares have declined 1.3% compared with the industry’s decrease of 11.3%.
Net product sales increased 12.1% from the year-ago quarter to $597.0 million driven by continued strong performance of Xyrem, strong initial Zepzelca sales and recovery in sales of Defitelio and Vyxeos. Royalties and contract revenues declined 26.8% to $3.9 million in the quarter.
Neuroscience Products
Sales of neuroscience products increased 7% to $456.9 million.
Sales of Xyrem, approved to treat cataplexy and excessive daytime sleepiness (“EDS”) in narcolepsy patients, rose 5% year over year to $447.8 million. Sales were driven by 4% rise in bottle volume growth. The average number of active Xyrem patients increased 2%. New patient diagnoses and enrollments of Xyrem are being hurt due to COVID-19, a trend expected to continue during the pandemic. However, the negative trend improved somewhat in the third quarter from the second-quarter level.
Jazz’s newest drug Sunosi recorded sales of $9.1 million in the quarter, higher than $8.6 million in the previous quarter. U.S. prescriptions rose 7% from the previous quarter.
Sunosi was launched for excessive sleepiness in narcolepsy & obstructive sleep apnea in the United States in July. It was approved in Europe in January this year with a rolling launch initiated in May.
Oncology Products
Oncology product sales in the third quarter of 2020 increased 37% to $138.2 million.
Erwinaze/Erwinase (for acute lymphoblastic leukemia [“ALL”]) revenues were $20.1 million, down 41% year over year due to supply constraints.
Defitelio sales increased 34% to $50.2 million in the quarter due to recovery in hematopoietic stem cell transplants that had previously been postponed due to the COVID-19 pandemic.
Acute myeloid leukemia drug, Vyxeos generated sales of $30.8 million, up 4% from the year-ago period
Zepzelca (lurbinectedin) was approved by the FDA in Junefor the treatment of adult patients with metastatic small cell lung cancer (SCLC) with disease progression on or after platinum-based chemotherapy. The company launched the drug in the U.S. market in July. The drug recorded sales of $36.9 million in the third quarter.
Other product sales declined 58.2% to $1.87 million.
Cost Discussion
Adjusted selling, general and administrative (SG&A) expenses rose 17.6% to $186.2 million due to higher expenses for multiple product launches.
Adjusted research and development (R&D) expenses declined 3% to $71.1 million, as easy comparison with the year-ago quarter offset the impact of escalating expenses related to pipeline development. The year-ago quarter’s R&D costs included a milestone payment to Pfenex, which was missing in the third quarter of 2020
2020 Guidance
The company raised its financial guidance for 2020 based on strong performance of its drugs during the third quarter and the robust launch of Zepzelca, an innovative new treatment for relapsed SCLC.
The company expects 2020 earnings in the range of $12.20-$13.00 compared with the prior expectation of $11.90-$13.00. Total revenues are expected to be in the range of $2.32-$2.38 billion versus $2.23-$2.33 billion expected previously.
Total product sales are anticipated in the range of $2.30-$2.36 billion versus $2.21-$2.31 billion expected previously.
In neuroscience, Jazz raised the lower end of the guidance range. Neuroscience sales are expected in the range of $1.76 billion to $1.8 billion compared with the previous range of $1.73 billion to $1.8 billion. The Oncology franchise is expected to record sales of $525 million to $565 million, higher than the previous range of $445 million to $525 million, reflecting the robust launch of Zepzelca and improving trends for Defitelio and Vyxeos.
While adjusted SG&A expenses are anticipated in the range of $73+025 million to $765 million (previously $700 million to $750 million), adjusted R&D expenses are expected to be in the band of $275 million to $305 million (maintained).
Pipeline Update
Xywav (JZP-258), a low sodium formulation and a Xyrem follow-on product, to treat EDS or cataplexy in narcolepsy patients was approved by the FDA in July and launched this week.
Xywav has also been developed for Idiopathic hypersomnia or IH in a phase III study. Positive top-line data from the study was announced last month. The company expects to submit a supplemental new drug application (sNDA) for label expansion of Xywav in IH patients in the first quarter of 2021 targeting a launch in the fourth quarter.
Jazz is currently developing JZP-458 in a pivotal phase II/III study for the treatment of ALL and lymphoblastic lymphoma. Jazz plans to submit a biologics license application to the FDA for JZP-458 by the end of 2020.The company plans to initiate a phase IIb study early in the first half of 2021 on another pipeline candidate, JZP-385, as a potential treatment for essential tremor.
Jazz Pharmaceuticals PLC Price, Consensus and EPS Surprise
Jazz Pharmaceuticals PLC price-consensus-eps-surprise-chart | Jazz Pharmaceuticals PLC Quote
Zacks Rank & Stocks to Consider
Jazz currently carries a Zacks Rank #3 (Hold). Some better-ranked small drugmakers are Cassava Sciences (SAVA - Free Report) , Endo International , and USANA Health Sciences (USNA - Free Report) , all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cassava Sciences’ stock price has surged 71.7% this year so far. The consensus estimate for 2021 has improved from a loss of 44 cents to earnings of 33 cents over the past 60 days.
Endo International’s earnings estimates have risen from $2.12 per share to $2.14 per share for 2020 and from $2.09 per share to $2.14 per share for 2021 over the past 60 days.
USANA’s earnings estimates have risen from $5.16 per share to $5.40 per share for 2020 and from $5.31 per share to $5.50 per share for 2021 over the past 60 days.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
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